Nvidia, the chip manufacturing giant, has exceeded Wall Street’s revenue and sales forecasts, alleviating investor concerns about substantial artificial intelligence (AI) spending that had previously unsettled markets.
According to its quarterly earnings report released Wednesday, the company’s revenue for the three months ending in October surged by 62% to $57 billion. This growth was primarily driven by strong demand for its chips used in AI data centers, with sales in that division climbing 66% to surpass $51 billion.
The forecast for fourth-quarter sales, projected at approximately $65 billion, also surpassed estimates, leading to a more than 3% increase in Nvidia’s shares during after-hours trading.
Nvidia, recognized as one of the world’s most valuable companies, is widely regarded as a leading indicator for the AI sector’s performance. As such, the chipmaker’s financial results are likely to significantly influence market sentiment.
In a statement, Chief Executive Jensen Huang noted that sales of the company’s AI Blackwell systems were “off the charts,” adding that “cloud GPUs [graphics processing units] are sold out.”
Amid growing concerns about potential overvaluation in AI stocks, the chipmaker’s quarterly report attracted heightened attention on Wall Street.
Leading up to Wednesday’s release, these concerns contributed to four consecutive days of decline in the S&P 500 index, as questions mounted regarding the returns on AI investments.
The expectations for Nvidia’s results were notably high.
Adam Turnquist, chief technical strategist at LPL Financial, commented that the key question was not simply whether the company would surpass expectations, “but by how much.”
Mr. Huang had previously indicated expectations of $500 billion in AI chip orders through the following year.
Analysts indicated that investors were seeking clarity on the company’s projected timeline for realizing these revenues and its strategies for order fulfillment.
As they strive to capitalize on a boom that has propelled stocks to record highs, major players in the technology sector are significantly increasing their AI spending.
Earnings reports from Meta, Alphabet, and Microsoft last month reiterated the substantial financial commitments these companies are making across areas such as data centers and chip procurement.
In an interview with the BBC, Sundar Pichai, CEO of Google’s parent company Alphabet, described the surge in AI investment as an “extraordinary moment,” while also acknowledging a degree of “irrationality” within the current AI boom. His remarks followed similar cautions from other industry leaders.
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